A bridge not far enough? Repairing roads and bridges comes with pros and cons
By Kathy Hoekstra – Watchdog.org – – Monday, January 9, 2017
A few months ago, a Detroit Free Press headline asked, “Will the Gordie Howe bridgeever get built?”
Planners say construction could begin as soon as mid-2018.
If that’s not soon enough, how about this year? Or this spring?
Norman F. Anderson is president and CEO of CG/LA Infrastructure and an adviser to the Trump “infrastructure task force.” That group is charged with prioritizing and coordinating the president-elect’s ambitious $1 trillion infrastructure program — that is, $137 billion in tax incentives used to lure the remainder from private investment.
Mr. Anderson said the task force already has identified 68 projects across the country that could begin this year — although he did avoid the term “shovel-ready” — for a total investment of $262 billion and the potential for 700,000 jobs.
The bridge would bear the name of the Red Wings immortal near the top of the list. Other examples provided to Watchdog.org are the Plains & Eastern Clean Line transmission project, Dallas-to-Houston high-speed rail, the Southwest Pass dredging project south of New Orleans, the Yakima River basin water pumping station and Veterans Affairs hospital construction.
Whom would Mr. Trump call to push the Gordie Howe International Bridge to the starting line?
Many who have followed the bridge saga would likely agree on billionaire Manuel “Matty” Moroun. He and his family own the 87-year-old Ambassador Bridge, which charges $5 for cars in the U.S. to cross. He has raised some of the biggest roadblocks to a publicly funded bridge that would compete with his family’s $60-million-per-year enterprise.
The latest gambit is a lawsuit claiming Michigan Gov. Rick Snyder, a Republican, is doing an illegal end run around the Legislature to get the bridge built.
Mr. Anderson demurred on the phone call speculation, saying the 2017 projects compiled by the task force all have the same unmistakable impediment to progress.
“All are projects that would be ready to go, simply lack the final approval, permit or push,” he said. “The point is that there are projects, many of them across all sectors, tied up in the soon-to-be former administration’s lack of leadership, willingness to take risks, and indecisiveness. And that’s not a political point. It’s just a fact.”
Mr. Anderson also chided the Obama administration for not having the right infrastructure professionals at the table, which led to misplaced spending.
“The failure of the Obama people to identify good projects and invest in those projects doesn’t logically mean there aren’t good projects; it just means that they sucked at it — radically underestimating the complexity, setting mediocre people to the task of execution and not following through,” Mr. Anderson said.
Veronique de Rugy, a senior research fellow at the free-market-oriented Mercatus Center, is equally critical of President Obama’s infrastructure efforts, especially his signature American Recovery and Reinvestment Act — the $800 billion stimulus package that kicked off his administration.
A 2011 Mercatus paper that Ms. de Rugy co-wrote, “Would More Infrastructure Spending Stimulate the Economy?” challenged the notion that a quick infusion of government money for infrastructure projects instantly creates shovel-ready jobs and jump-starts economic growth.
“President Obama had roughly $47 billion in direct infrastructure spending, and the idea was to invest it into ‘shovel-ready’ projects. And it would take the place of the private sector during the recession,” she explained to Watchdog.org. “And once the economy picked up, the private sector would then come back.”
The federal government’s final report in 2014 shows that $30 billion of that money went to transportation infrastructure, while the bulk of the rest went toward shoring up state and local governments and sudden paperwork-laden grant programs.
“President Obama himself had to acknowledge that there are just not that many ‘shovel-ready’ projects,” Ms. de Rugy said.
Ms. de Rugy said that even though Mr. Trumpaims to encourage more private investment through tax incentives, the plan likely will go down the same unsuccessful path. It’s not the mix of government and private spending, she said. It’s which projects are chosen and why, often a choice based on politics and popularity rather than merit.
A project as high-profile as the Gordie Howe Bridge is a no-brainer for investors, who can expect ribbon-cuttings, outsized press coverage and perhaps a cut of revenue. After all, the Ambassador Bridge pulls in $60 million per year.
But how eager are investors to fix crumbling highways in Detroit that get motorists to the bridge?
“One of the things we may actually need is maintenance. But I don’t think that’s what [Mr. Trump is] going to have in mind — to just do maintenance. It’s not that lucrative for the private sector,” she said. “So I think they’re going to find that the administration’s grand idea is going to be a whole lot of misallocation of capital or that there’s no amount of tax credit that can actually attract the private sector to do some of the stuff that would be useful to do.”
Another pitfall the incoming administration needs to avoid, Ms. de Rugy said, is considering government infrastructure spending a “jobs” program. It is a popular notion, especially among Democrats looking to recapture the votes of American workers who have defected to Mr. Trump.
“If we need to build infrastructure, try to get the highest quality for the lowest price and try to ignore the ‘economic impact’ or the ‘jobs impact,’” she said. “That’s not your reason to do it. It’s because you need it.”
Mr. Anderson blames infrastructure sluggishness on a market shackled by regulations, the “incompetent, slow and sleazy execution of studies” that cause endless delays, and leadership unwilling to challenge the regulatory status quo or revitalize the public sector.
Ms. de Rugy and Mr. Anderson agree, however, that time is of the essence.
“The infrastructure is a very, very bad tool to try to stimulate the economy in the short term,” Ms. de Rugy said. “It has to happen fast. And that’s actually really just hard to put in place.”
The ever-optimistic Trump team thinks not.